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The Federal Reserve Bank of New York (New York Fed) today announced that it has sold the entirety of the TRIAXX CDO holdings from its Maiden Lane III LLC (ML III) portfolio to Merrill Lynch, Pierce, Fenner & Smith Incorporated following a competitive bid process.

The New York Fed decided to move forward with the transaction only after determining that the winning bids represented good value for the public. This transaction further reduces the ML III portfolio and loan at a desirable price.

"The winning bids, which were materially higher than the original prices ML III paid, demonstrate continued interest in these assets and represent good value for the public," said William C. Dudley, president of the New York Fed.

Consistent with the current investment objective of ML III, the New York Fed, through BlackRock Solutions, will continue to explore the sale of assets held by ML III. There is no fixed timeframe for future sales; at each stage, the Federal Reserve will sell an asset through a competitive process and only if the best available bid represents good value, while taking appropriate care to avoid market disruption.

Information regarding each subsequent sale will be posted on the ML III section of the New York Fed’s website. The information that will be provided will include the circulation date of the offering, bid submission deadline, CUSIP number(s) and current face amount offered, and, if a sale is executed, the name of the buyer and trade date of the sale.

In addition, as part of its regular disclosures, the New York Fed will provide a list of any holdings sold by ML III within the previous month. It will also provide quarterly updates on total proceeds from sales, including a breakdown by counterparty. Proceeds from the sale of the TRIAXX CDO holdings will be captured in the quarterly report scheduled for July 16, 2012.

After ML III sells its last position, the New York Fed will provide further details regarding these transactions, ensuring timely accountability without jeopardizing the ability to generate maximum sale proceeds for the public.